II 112th CONGRESS 1st Session S. 1007 IN THE SENATE OF THE UNITED STATES May 17, 2011 Mr. Inhofe introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to eliminate the taxable income limit on percentage depletion for oil and natural gas produced from marginal properties.

1.

Elimination of taxable income limit on percentage depletion for oil and natural gas produced from marginal properties

(a)

In general

Subparagraph (H) of section 613A(c)(6) of the Internal Revenue Code of 1986 (relating to oil and natural gas produced from marginal properties) is amended to read as follows: (H)

Nonapplication of taxable income limit with respect to marginal production

The second sentence of subsection (a) of section 613 shall not apply to so much of the allowance for depletion as is determined under subparagraph (A). . (b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2010.